Searching for Socialism: The Project of the Labour New Left from Benn to Corbyn

By Leo Panitch and Elaine Forman Crane

Jeremy Corbyn's rapid ascent to the leadership of the Labour Party, driven by a groundswell of popular support particularly among the young, was met at the time by a baffled media. Just where did Jeremy Corbyn come from? In Searching for Socialism, Leo Panitch and Colin Leys argue that it is only by understanding Corbyn's roots in the Bennite Labour New Left's long struggle to transcend the limits of 'parliamentary socialism' and democratise the party, as a precondition for democratising the state, can you understand his surge to become leader of the party.

Closely analyzing the forces inside the party aligned against Corbyn's leadership, Panitch and Leys explain what happened between the validation of the Corbyn project in the 2017 election, while advancing an ambitious programme of democratic socialist measures unmatched anywhere since the 1970s, and the electoral defeat amidst the Brexit conjuncture of 2019. They argue that while this defeat marked the farthest point to which the generation formed in the 1970s was able to carry the Labour new left project, it seems unlikely that the new generation of activists will quickly see any other way forward than continuing the struggle inside the Labour Party, so as to fundamentally change it. In the face of the contradictions being generated by twenty-first-century capitalism, and the need for discovering and developing new political forms adequate to addressing them, this book is required reading for democratic socialists, not just in Britain but everywhere.

• Language: English
• Publisher: Verso UK
• Release date: Apr 21, 2020
• ISBN: 9781788738514

Leo Panitch

Leo Panitch is Canada Research Chair in Comparative Political Economy and Distinguished Research Professor of Political Science at York University. Editor of The Socialist Register for 25 years, his many books include Working Class Politics in Crisis, A Different Kind of State, The End of Parliamentary Socialism, and American Empire and The Political Economy of Global Finance.

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Searching for Socialism

Searching for Socialism

The Project of the Labour New Left

from Benn to Corbyn

Leo Panitch and Colin Leys

First published by Verso 2020

© Leo Panitch and Colin Leys 2020

All rights reserved

The moral rights of the authors have been asserted

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Contents

Preface

1. Beyond Parliamentary Socialism:

Transforming the Labour Party

2. The Roots of Labour’s New Left:

From Modernisation to Democratisation

3. The Limits of Policy:

Searching for an Alternative Strategy

4. A Crisis of Representation:

The Conflict over Party Democracy

5. Disempowering Activism:

The Path to New Labour

6. New Labour in Power:

The Dénouement of Modernisation

7. The Left versus New Labour:

In and Against the Party

8. Beyond New Labour:

The Revival of the Labour New Left

9. ‘For the Many, Not the Few’:

Defending and Evolving the New Left Project

10. Implementing the New Left Project:

Possibilities and Limitations

11. The Brexit Conjuncture and Corbyn’s Defeat

Notes

Index

Preface

Each of the three great economic crises of the last century – the 1930s, the 1970s and the decade after 2008 – precipitated a crisis in the Labour Party. Each time, the crisis posed fundamental questions of ideology, organisation and unity, and ended up by propelling into the leadership a radical socialist MP from the party’s left wing. In each instance this produced a sharp reaction aimed at blocking whatever potential the crisis had for taking the party in a new democratic-socialist direction. And in each case Britain’s relationship with Europe played an important role.

The first instance was in 1931, at the onset of the Great Depression, after the Labour leader Ramsay MacDonald had formed a ‘National Government’ in order to impose massive cuts in social expenditure on the unemployed and the working poor. In the ensuing general election, the Labour Party, although it won 30 per cent of the vote, was reduced from 287 MPs to 52. In the wake of this, the radical socialist and pacifist George Lansbury was elected leader, and party policy took a sharp turn to the left. Yet, despite massive street demonstrations by the unemployed, most of the remaining Labour MPs were opposed to any except purely parliamentary measures, leaving Lansbury feeling, as he wrote, ‘absolutely helpless’ in face of the imposition of ever more draconian austerity. In 1935, after the party conference endorsed military rearmament in response to developments in Europe and the Soviet Union, Lansbury resigned. His successor, Clement Attlee, put the party in the hands of ‘a much more professional team’, but ‘also a much more responsible one’, as Ralph Miliband wrote in Parliamentary Socialism. This was the team that would later carry through Labour’s major post-war reforms, while leaving unchallenged the capitalist economy, the inherited structures of the state and the country’s place in the new American empire.

In the 1970s, as the Labour governments of Harold Wilson and Jim Callaghan responded to a new economic crisis by abandoning the Keynesian welfare state and restraining union militancy, a new Labour left emerged that was determined to democratise and radicalise the party; and soon after the party’s defeat by Margaret Thatcher in 1979, Michael Foot, whose political formation was rooted in the Lansbury years, was precipitated into the leadership. But in the interest of party unity Foot allied himself with the centre-right of the parliamentary party against the Labour new left and its most prominent spokesman, Tony Benn, reasserting the party’s commitment to traditional parliamentarism. This did not prevent a second heavy defeat, by Thatcher in 1983. Nor did the ruthless repression of Labour’s new left by Foot’s successor, Neil Kinnock, prevent two further electoral defeats. Instead it paved the way for ‘New Labour’, and the embrace of neoliberalism under Tony Blair and Gordon Brown. Throughout these years, too, the issue of Britain’s relationship with Europe was a constant complicating dimension of the party’s internal divisions.

The contradictions of New Labour in government, culminating in the financial crisis of 2007–08, first propelled ‘Red Ed’ Miliband to the leadership. But when he, like Foot, gave top priority to securing the unity of the parliamentary party, leading yet again to electoral defeat in 2015, the crisis finally led to the election as leader – this time by the whole membership of the party – of Jeremy Corbyn. His election, the surge in membership that accompanied it, and the support he received from the trade unions finally brought the project of the Labour new left to the top of the party’s governmental agenda. The question now was whether the cycle of resistance and neutralisation would once again be repeated, or whether the Labour Party could after all become the agent of democratic-socialist advance in the UK.

Jeremy Corbyn and his most senior colleagues had been formed in the previous attempt to make this happen, in the late 1970s and early 1980s. In The End of Parliamentary Socialism: From New Left to New Labour, published in 2000, we traced the record of that attempt, and its ultimate defeat by the combined forces of its opponents inside and outside the party. Our conclusion was that ‘the route to socialism does not lie through the Labour Party’. This did not make us despondent. While accepting that ‘the first reaction to disillusionment … is fatalism, in the face of what are presented as global forces beyond anyone’s control’, we thought that this mood would ‘sooner or later change to resentment and anger, and a rediscovered will to act, to which a new socialist project must respond’. We did not foresee how soon, in reality, this would happen, in the reaction against the inequality, militarism and economic failure of the neoliberal project; nor that events would again propel a socialist into the leadership of the Labour Party and reopen the question of whether the party could yet be transformed into one capable of leading the socialist transition that the surge of activists into its ranks called for.

Although the enthusiasm behind the Corbyn leadership and the achievements of its first years were impressive, the obstacles the Labour new left project faced were if anything greater than ever. By early 2019 it was clear that its prospects of success had been severely whittled down, so that its eventual defeat in December was not a surprise. The country’s relation with Europe played an even more critical role in this than in the past, but the continuities with what had blocked the Labour new left project since the 1970s, above all the fierce obstruction from within the parliamentary party and from the media, were once again evident in every aspect of the events which culminated in defeat in the December 2019 election.

We have therefore condensed the previous book into the first five chapters of this one. The six chapters that follow cover the last twenty years. For help in researching them, we are extremely grateful to all those people inside the party, at every level, from whose knowledge and insights we have learned so much, for the generous time and help they have given us. In all of our work on the project of the Labour new left, we have tried to point to its huge importance while at the same attempting to analyse as clearly as possible the obstacles to realising its potential. But, in whatever form, the drive for democratic socialism will continue. This book is intended as a contribution and a tribute to the purpose and vision of those who, in wanting the Labour Party to become a genuinely democratic-socialist agent of transformation, have done so much to recover the capacity to think ambitiously about social change.

1

Beyond Parliamentary Socialism:

Transforming the Labour Party?

The first great economic crisis of the twenty-first century destabilised social-democratic parties everywhere: the assumption that capitalism would coexist with and sustain governments committed to social progress and a broad degree of economic equality was finally proved illusory. And socialist forces, to the left of social democracy, had become very weak. As a result, socialists have rarely been able to intervene effectively in the response to the crisis, which has redounded instead to the advantage of the far right.

Jeremy Corbyn’s election as leader of the Labour Party in 2015 was one of the very few exceptions to this rule. His campaign for the leadership put back on the political agenda a democratic-socialist project that had emerged in the previous great crisis of capitalism in the 1970s. What that crisis had shown was that if you could not advance beyond the reforms achieved in the postwar period, you were in danger of losing them. In Britain those who grasped this truth became known as the ‘new left’. Inside the Labour Party a new left current developed practical policies for a socialist alternative and organised to win support from the party and trade unions. Their project was eventually defeated, after years of struggle whose twists and turns prefigured much of what has been witnessed since Corbyn’s election.

The new left in Britain had first emerged in 1956. It sought to launch a new democratic-socialist alternative to transcend the ever more apparent problems, limitations and disappointments of both communist and social-democratic parties. It never succeeded in spawning a new political party to act as the vehicle for this project, yet its leading figures were highly sceptical of any possibility of turning the Labour Party into such a vehicle. Ralph Miliband’s critical study of the history of the Labour Party, Parliamentary Socialism, published in 1961, played an important role in defining the British new left’s politics in this respect.¹ At times, Miliband even went so far as to declare that ‘the belief in the effective transformation of the Labour Party into an instrument of socialist policies … is the most crippling of illusions to which socialists in Britain have been prone’.² His work showed that Labour’s prevailing conception and practice of parliamentary socialism were based on three essential concepts: democracy as a contest between competing teams of elites; the extra-parliamentary party as, in the final analysis, a servant of the parliamentary team; and citizens primarily as mere voters, not as active participants in self-government.

Nonetheless, a significant current developed within the Labour Party in the 1970s which shared the new left’s outlook, but took the view that there was no alternative but to attempt precisely such a transformation of the party. Yet unlike the Conservative Party at the time, which relatively quickly embraced ‘Thatcherism’, the Labour Party was extremely resistant to change. As Stuart Hall noted in a famous essay shortly before the 1979 election, most of its leaders were wedded to a conception of politics in which ordinary people were passive ‘clients of a state’ over which they had no real control, when what was needed was a party of ‘a more broadly mass and democratic character’.³ The Labour new left, with Tony Benn as its most prominent figure, proposed to make precisely that change – to make the party capable of shaping a progressive solution to the crisis, win support for it, and carry it through in office – as a prerequisite of changing the state.

In setting this as its goal, the Labour new left was ahead of its opponents in grasping the seriousness of the crisis of the postwar order. Even as sophisticated a thinker as Tony Crosland, for instance, believed in 1970 that ‘no fundamental rethinking’ needed to be made of the analysis of capitalism he had offered in the early 1950s. As late as 1974, he could write that there were no ‘signs of a new and fundamental crisis’ in the western economies.⁴ Tony Benn, by contrast, saw as early as 1970 that a fundamental democratic reform of both the party and the state was needed in order to prevent the ascendancy of ‘a new philosophy of government, now emerging everywhere on the right’, dedicated to freeing business and controlling the citizen.⁵ This was five years before the publication in 1975 of the Trilateral Commission’s famous report on the ‘governability of democracies’, in which a group of American, European and Japanese capitalists, former bureaucrats and right-wing intellectuals argued that governments in capitalist societies had become ‘overloaded’ by claims to social justice and participation; governability and democracy were ‘warring concepts’.⁶ Indeed, as productivity growth faltered in the late 1960s, and international competition intensified, the postwar compromise between capital and labour had already started breaking down. Even social-democratic governments began shifting the burden of taxation from capital to labour in order to sustain capital’s after-tax profits, while labour began to seek compensation through higher wages and improved social services. This led to a crisis in the postwar Keynesian welfare state everywhere.⁷

The Crisis of Social-Democratic Parties

In the late 1960s, the collapse of the postwar settlement was a critical turning point in the history of the capitalist countries of the West. The response of the ‘new right’ was to call for the removal of restrictions on private capital accumulation and capitalist culture, and as far as possible for the replacement of collective decision-making by the operation of markets. The new right soon gained the ascendancy within the conservative parties of the West, which allowed it to reach outwards as a coherent political force, gain office, and embark on the market-oriented reconstruction of social, economic and political life that has characterised the past four decades. The response of the new left, on the other hand, was to call for the socialisation of capital and the democratisation of the economy and the state.

In 1976, even the once all-powerful Swedish Social Democrats were defeated for the first time in forty years – though, simultaneously, the Swedish labour movement adopted the Meidner project for democratising industry through ‘wage-earners’ funds’, and quite sober academic analysts expected this to lead to a ‘transition to socialism’ in Sweden when the Social Democrats eventually returned to power. In Germany, the Social Democratic (SPD) government of Helmut Schmidt explicitly abandoned Keynesianism after 1973; the German trade unions tried but failed to get the SPD to adopt an industrial strategy involving investment controls similar to those being proposed by Labour’s new left in Britain. In the process, the SPD’s Young Socialists, whose ideas about radically redrawing the balance between parliamentary and extra-parliamentary activity had many parallels with those of the Labour new left, were stifled; but this in turn contributed strongly to the subsequent emergence of the German Greens. In the Netherlands in the early 1970s, a movement very similar to the Labour new left emerged in the Dutch Labour Party, and made extensive gains. It called for greater control by activists over the process of candidate selection and for limits on the power of the party leadership to compromise on the party’s declared policies when in office.⁸ In Canada, a new left emerged in the New Democratic Party in the late 1960s; by 1971 it was able to make a strong bid for the party leadership, before being expelled in 1972. Meanwhile, France’s socialist party, which had been out of office for a generation, revived strongly and adopted an economic programme even more radical than the one then being advocated by the left in the Labour Party. By the end of the decade, it was poised to achieve a stunning electoral victory under a leader, François Mitterand, who insisted that his project had ‘nothing in common with the corrupt compromises of a Schmidt or a Callaghan’.⁹ The Labour new left was thus part of a much wider response within parliamentary socialist parties to the crisis of the postwar order. What distinguished it from the others, however, was how much further it went in fighting for a radical reorganisation of the relationship between state and party, and between party and people.

The crisis of the system brought the contradictions within the social-democratic movements themselves into focus. The internal life of the social-democratic parties had undergone a serious decline as a result of their integration into the institutions of ‘managed capitalism’. As the socialist vision gave way to the pragmatic management of capitalism, there was little scope or need for a party-based ‘counterhegemonic’ community. Party branches continued to serve an electoral function and play their allotted role at party conferences, but they had lost whatever significance they might have had – which of course varied from country to country – as centres of education and mobilisation oriented to an alternative way of life. In countries where mass socialist newspapers were marginal or nonexistent, as in Britain, there no longer appeared any need to develop any, since the leaders’ corporatist and pragmatic ideology gained sufficient currency (even if not explicit editorial support) through the mainstream media. Where a socialist popular press did exist, as in Scandinavia, it could become increasingly ‘catch-all’ and ideologically anodyne. Individual membership ceased to be so crucial, and in fact tended to decline in almost all the social-democratic parties in Europe in the postwar era.¹⁰

The decline of intra-party life did not seem to matter much so long as it did not threaten the social-democratic parties’ links with the trade unions, while their acceptance as ‘parties of government’ gave them the legitimacy they needed for periodic election successes. But their failure to resume their former active roles in class formation and socialist education meant that they increasingly depended for electoral success on short-term policy programmes and personalities. When the conditions that had made social-democratic management of national capitalist economies possible ceased to exist, this ‘hollowing out’ was suddenly revealed as a serious liability.

One indicator of the impending crisis in the social-democratic parties was the radicalisation of the student movement in the 1960s. As the image of the United States as a decoloniser was replaced by that of guarantor of military dictatorships, the ‘Atlanticism’ of Europe’s social-democratic governments became a liability. But this radicalisation had deeper sources as well. What Ralph Miliband termed ‘a state of desubordination’ affected an entire generation.¹¹ The rhetoric of ‘social citizenship’ that had accompanied the establishment of the welfare state no longer held strong appeal. It was no longer the social justice and political pluralism of social democracy that impressed, but rather the partial character of that justice and the elite nature of that pluralism. When they were confronted by the cry for ‘participation’, social-democratic ministers who had become immersed in the executive structures and parliamentary apparatuses of the state were either uncomprehending or condescending. When the cry extended to the no less vague but certainly more militant call to ‘smash capital’, they thought they recognised an old Cold War foe. But they were mistaken: a new generation had emerged whose politics could not be reduced to those polarities.

Moreover, it was not only students, women and a variety of newly activated minorities and causes, from gay rights to environmentalism; it was people in almost every segment of the population who were being prompted to new levels of political interest and activism as the contradictions of social democracy and Keynesianism came to a head. A counter-current was also flowing strongly, of course, in the mass consumerism which capitalist markets had generated under the conditions of world-wide economic expansion – ‘the joyous ringing of capital’s cash-tills’.¹² Which current would prove dominant in the resolution of the crisis was not a foregone conclusion, as the massive ideological effort on the part of the new right clearly showed. Throughout the 1970s the issue seemed, and perhaps was, still in doubt.

Meanwhile, a generation of workers was also caught in the conflicting currents of consumption and ‘de-subordination’. Their discontent took apparently more mundane forms than the burgeoning radicalism of students and the new social movements, yet it was very evident in factories and offices, as well as in youth culture. These young workers did not remember the Depression or have any affinity with Cold War trade unionism. They had been raised in an acquisitive, affluent society in which, they were repeatedly assured, class barriers were being swept away. But the image of the ‘high mass-consumption society’ held up to them by television contrasted painfully with the reality of life on housing estates and the shop floor. To hope to live like the middle class, they had to act like militant workers: to go in for more militant collective bargaining, the one sphere in which they had some real power. The ‘affluent society’ thus produced neither an ‘end of ideology’ nor an end of class conflict. It is true that the two main streams of ‘de-subordination’ – the ‘new social movements’ and the militant workers – rarely coalesced, apart from very briefly during the heady days of May ’68; but the socialist parties had lost most of their capacity to appeal successfully to either. The radical students, feminists, ecologists, gay rights activists and others mostly looked elsewhere, while the workers mostly treated politics as instrumentally as the social-democratic parties treated them.

The social-democratic parties – compromised as they were by their continuing dependence on private capital accumulation as the engine of economic growth, and by their own absorption into the structures and culture of the state – had lost their ability to resume the leadership of the anti-capitalist currents in society. Their only distinctive governmental strategy to cope with the crisis – corporatism – was consistently undermined by the industrial militancy that the contradictions of capitalism provoked.¹³ And when they were in office they found themselves unable to contain the inflationary pressures, and the consequent threat to profits and the balance of payments, which this militancy in turn produced. In office, capital effectively vetoed what the unions demanded in return for the wage restraint that the social-democratic governments wanted to use to curb inflation: effective price and dividend controls, a significant role for unions in determining investment policy, and a redistributive fiscal policy. In the meantime, it became harder and harder to maintain the growth of the ‘welfare state’, which was in any case administered in a hierarchical and bureaucratic manner, and was often resented rather than loved by those most dependent on it.

It was to this increasingly barren prospect that the resurgent left wing in the social-democratic parties of the West was responding in the 1970s. Even just to preserve the gains of the ‘golden age’ of the 1950s and 1960s now meant going beyond the compromise that had produced them, and putting socialism back on the agenda. The extra-parliamentary parties of the Marxist–Leninist left – old and new – had failed to make any significant impression. But the social-democratic parties were themselves no longer capable of redefining their relations with the various social movements, or with the branches of the state responsible for both party and state. For this to be seriously contemplated, their structure and culture needed to be radically changed.

The Issue of Party Democracy

The originality of the British new left’s initiative lay in emphasising the prime strategic goal: to create a new popular base for democratic socialism. In France, Mitterand’s Parti Socialiste Unifié (PSU), in spite of its rhetoric of making a radical break with the ‘errors of the past’, followed highly traditional lines after it came to power in 1981, both in its relations with the state and in its internal organisation.¹⁴ In Greece, the undemocratic nature of Andreas Papandreou’s Panhellenic Socialist Movement (PASOK), from 1974 to 1981, became a byword, in spite of its democratic pre-election promises.¹⁵ In Sweden, notwithstanding the country’s relatively open and democratic culture and state practices, the proposal for wage-earners’ funds put forward by the trade union movement was not backed by any popular mobilisation; the technocratic and pragmatic wing of the leadership of the Social Democratic Party (SAP) treated the scheme with suspicion, ensuring that it was referred to a series of commissions. During the three-year intervals between party congresses, its contents were diluted to the point where it became, in practice, little more than a forced savings scheme to provide employers with a new source of capital.¹⁶

What especially distinguished the Labour new left in Britain was its drive to link its version of such an agenda with an attempt to democratise the party – an attempt that Tony Benn argued was necessary in order to

extend Labour’s representative function so as to bring ourselves into a more creative relationship with many organizations that stand outside … to reconstruct the Labour Party so that a Labour government will never rule again but will try to act as a natural partner of a people, who really mean something more than we thought they did, when they ask for self-government.¹⁷

In raising this issue, the Labour new left was taking on the enormous problem that Robert Michels had identified at the beginning of the century: the tendency to oligarchy in mass socialist parties. Conservative parties were elitist and undemocratic too, Michels noted, but this was not a problem for them, since they existed to defend the existing social order. It was a very different matter for parties nominally committed to radical change, if their leaders were able to insulate themselves from pressures from socialist activists and the mechanisms of democratic control provided for in the party constitution.¹⁸ But the issues raised by the Labour new left went further than those raised by Michels, incorporating the nature of democracy in the state itself. As Max Weber had seen more clearly than his pupil Michels, it was through the embrace of the state, even more than through inner-party oligarchy, that the socialist and democratic thrust of the mass working-class party was neutralised: ‘In the long run’, Weber wrote, ‘it is not Social Democracy which conquers the town or the state but it is the state which conquers the party’.¹⁹ In Britain, as observers from R. H. Tawney to Lewis Minkin have noted, the policy of Labour leaders in office quickly became ‘to emulate in toto … the governmental practice of their opponents, playing not only to the existing rules of the game but with the same style as their opponents and, in rapidly increasing measure, for the same ends’.²⁰

This assimilation to the routines and perspectives of the British state was the real source of the long-running debate in the Labour Party over the autonomy which the parliamentary party leadership always claimed from the party outside parliament, whose annual conference was constitutionally invested with the ‘direction and control’ of the work of the party. The leading student of British political parties, Robert McKenzie, advocated changing this provision in the party’s constitution, because in his view it was inconsistent with the role the Labour Party had to play as a party of government under the existing rules of the British constitution.²¹ Whereas McKenzie saw the passivity of the population between elections as facilitating the autonomy of the party’s MPs from extra-parliamentary pressures, Ralph Miliband, in his critique of McKenzie, contended that the proper role of a democracy was to develop the electorate so that it would become ‘capable of political initiative through organization, mainly political organization’. McKenzie’s argument against party democracy rested on the fact that party members were only a minority of the population; Miliband responded that it was an ‘odd notion of democracy that the active minority should be penalized for the apathy of the majority’.²²

Consistently enough, when the Labour Party’s constitution was amended in the opposite direction in 1980, on the initiative of the Labour new left – enhancing the powers of the membership and the conference vis-à-vis the parliamentary party – McKenzie condemned the change. What had to be recognised, he said, was ‘that political parties are unique among political organisations in that their leaders must escape control of their followers if they are to fulfil their broader role as the principal decision-makers in the political community’, which included being able ‘to take into account all other interest group volitions and demands’.²³ The Labour left thought that the one set of interests that were not being taken into account with the abandonment of the postwar settlement were those of the working-class majority, and that only if the party was democratised could it act as a countervailing force against the volitions and demands of corporations and the international financial institutions. For McKenzie, of course, ‘democratic government’ meant the efficient management of the existing social order. For the Labour new left, the issue was whether a transition to socialism could be effected through extending and deepening intra-party democracy, in turn effecting a broader democratisation of society, economy and the state.

Significantly, it was Tony Benn’s ministerial experience in the 1960s, and the restrictions Harold Wilson sought to impose on him as a minister, that led him to see the need for the party to concern itself with the construction of ‘a different type of state’.²⁴ What seemed so threatening to the party leadership about the Labour new left’s focus on the need for ‘a different type of state’ was not just whether the leadership would be left free to operate within the rules of the existing state system without having to answer to the extra-parliamentary party. Even more important was whether, as ministers (and even as potential ministers), they should continue to have no responsibility for mobilising popular support for new socialist measures, including measures to change the state – both to broaden its scope and to enlarge the public’s role in it.

While the Labour new left’s ideas about the changes needed in the state for a transition to socialism were mostly speculative and incomplete, some things were fairly clear. It became evident that public ownership of a good part of the financial sector would be necessary, and that this could not take the form of the mere legal transfer of banks from private to public hands: both the public and the banking workforce would need to have a different kind of relationship to publicly owned banks. At the time of the 1945 nationalisations in other sectors, demands for industrial democracy had been ignored: they now needed to be implemented across the board. This in turn required the party leadership not only to work out new models of public enterprise capable of providing this, but also to work actively to win public support for them. This was the precise opposite of what, following an overwhelming vote in favour of a publicly owned financial sector at the 1976 Labour conference, the government and the union leadership actually did, which was to do their best to discredit the whole idea and bury it. In general, ‘a different type of state’, related in a different way to a different type of party as well as to the public at large, called for a leadership with a commitment to a socialist project – one that did not see a modus vivendi with capital, with its corollary of a narrow, elitist conception of parliamentary democracy – as the first principle of government.

But what the Labour new left could actually achieve was constrained not only by the need to fight every inch of the way for a few structural reforms in the party – reforms that, far from being very radical, were already